Buying your home can be nerve-racking, especially if it’s the first time. The buying process is exciting and often complex. The chances of making a mistake are relatively high.

In today’s real estate market where demand surpasses supply, you can’t afford to make mistakes. And this is just the tip of the iceberg. If you are in the market to buy a house, here are five pitfalls avoid.

Not Doing Your Homework Well

Fortune favors the prepared in real estate. And preparedness begins with understanding your finances. A wise buyer examines assets, analyzes debts and gets finances pre-approved before jumping into the house hunt.

Know the neighborhood well, since you’re also buying a location. It’s paramount to research about the quality of schools, upcoming zoning issues and crime level. Not all suburb spots are ideal to live in.

Picking The Wrong Mortgage

Getting your loan preapproved puts you in a better position to negotiate. Find out how much property you can afford. Don’t rely on your bank’s internet site only. Instead, use calculators and consult with your trusted mortgage professional to find out how much you can borrow.

It’s worth noting that what banks show they can lend can differ with what they will lend. As such, it’s imperative to choose your mortgage carefully. Compare offers from various banks or consult an independent finance broker.

Going With The Market Flow

Resist the temptation to flow with the market rather than your needs. The real estate market goes in cycles. There are times suitable for buyers, and times suitable for sellers.

However, don’t gamble with your future by sitting and waiting for the right time. Once you know your budget, get your finances organized, think about your needs now and in future. Then use short term market conditions to make long-term lifestyle choices.

Exceeding Your Budget

Most homebuyers fall for the trap of picking more appealing properties that cost more than their budgets. Falling into this pitfall can derail your future finances.

Although it’s human nature to yearn for more than we can afford, resist the desire. Surpassing your budget exposes you to potential financial shocks with bigger payments, property taxes and more.

Falling In Love

If you find the perfect house, keep it to yourself. Don’t let the sellers read your emotions. If they do, they may use them against you while negotiating.

Wise buyers know there are several homes out there, and there is one that’s right for them. And if you can’t afford one or your offer isn’t accepted, keep looking and move on.

Buying a home is rejuvenating. However, if you’re not careful, you can make mistakes you may regret later. Consult with your trusted real estate expert and trusted mortgage professional to get the best advice for your situation.

Most consumers believe if they pay their bills on time, they need not worry about their credit score. Oftentimes, it is a rude awakening when they apply for a mortgage loan, car loan, or any revolving credit to learn they are not going to get the lowest rates available due to their credit score. This is because paying bills on time only accounts for 35 percent of your credit score. The remaining 65 percent is spread out among other factors that impact your credit score.

Credit Usage and Impact on Score

Nearly one-third, 30 percent, of your credit score is based on how much of your available credit you are using. For example, if you have combined credit available of $100,000 and you use $90,000, you will suffer a decline in your credit score. Those consumers who have similar credit lines and are using $9,000 will get a slight bump in their score.

New Credit vs. Old Credit

We seldom think about how long we have held a line of credit open. However, some consumers “exchange” credit lines for other credit lines due to special offers made by credit card companies. This is not necessarily a good idea since 15 percent of your credit score is determined by the age of your credit accounts. The longer you have had an account, the better in most cases. The calculation will take all open credit accounts, take the amount of time they have been open and get an “average age”. If you have six accounts which have been open less than a year and six that have been open five years, the newer accounts will count against you in this case.

Mixing up Credit Lines

A consumer who has only a mortgage and a single credit score will take a modest hit on their credit score versus a consumer who has multiple credit cards, a mortgage, and an auto loan. The types of credit you have will account for 10 percent of your credit score and the more varied your open credit lines, the better. While it is inadvisable to open new credit lines simply to show a variety of types, having installment loans, retail credit cards, and traditional credit cards is a good idea.

New Lines of Credit Opened

One danger many consumers are unaware of is suddenly opening new lines of credit. For example, a new homeowner may open a new account with a home improvement store, a general retail store, and a new credit card to help them furnish and repair their new home. This could be a red flag since the credit lines are new, and there is no established history on the mortgage, or the new credit lines. Since this factor accounts for 10 percent of your credit score, you could suffer a temporary decline in your credit score.

Consumers should be aware of the factors which impact their credit score, and also be aware of the factors that do not impact their scores. Understanding your credit score may be the most important tool you have when buying a home, or refinancing your current mortgage.

Please contact your trusted mortgage professional to discuss how your credit score may be impacting your ability to finance your next home purchase.

In the ideal home-buying scenario, you’d have plenty of time to find the perfect home. However, this is not always possible. Maybe you are relocating for a job and have to buy a house from across the country. If this is the case, you might have to limit the time that you spend house hunting.

Here are some tips to help you make your search as productive as possible.

#1 Get A Mortgage Pre-Approval

Before attending open houses and searching for a home, you should get pre-approved for a mortgage. Getting pre-approved for a mortgage will help you identify the exact price range that you should be shopping for. It will also let home sellers know that you are a serious buyer. If you are competing with other buyers, a seller will be more likely to take your offer seriously if they know that you can afford the home.

Sometimes you’ll hear the terms pre-qualification and pre-approval thrown around interchangeably. However, these two terms are very different. A pre-approval is much more valuable when it comes to buying a home. Although you will have to provide a lot more information for a full pre-approval, this qualification will provide you with a specific loan amount that you are approved for. A pre-qualification is just an estimate of the amount that you can afford based on your income and other factors. It is not as personalized or customized for your specific situation as a pre-approval.

#2 Find A Good Real Estate Agent

Find a good real estate agent who is knowledgeable of the area that you want to buy in. Ideally, they have lived in the area for a long time and know the community. A good local agent can bring invaluable knowledge to the table about the city. They should be familiar with the homes in the area. They might even know about homes that aren’t on the market yet but will be soon. This knowledge can be invaluable when you are in a time crunch and want to get the most out of your house hunting time.

#3 Make A List Of Your Must-have Amenities

You don’t want to spend time looking at homes that won’t meet your needs. There are probably some things that you’d like to have in a house, as well as things that you must have. So, if you’re in a time crunch, the first thing you should do is make a must-have list. Make a second list of things that you’d like to have but that are not required. Don’t bother looking at homes that lack the qualities on your must-have list.

First things first, contact your trusted home loan professional and get your pre-approval started today!

In an ideal world, you’d have plenty of time to find the perfect home. However, that does not always happen. Maybe you are relocating because of a job transfer. Fortunately, it doesn’t have to take months to find the perfect home. You can speed up the process of buying a home utilizing some tried and true tips.

Here are some of the best ways to speed up the house buying process.

Find An Experienced Real Estate Agent

An experienced agent likely has an extensive network and many connections. They might know what properties are coming on the market before anyone else does. They can also help you assemble a great team of real estate professionals such as a mortgage banker and real estate attorney.

Get A Mortgage Pre-Approval

Obtaining a home loan is a long process that requires a lot of paperwork. You can speed up the process by getting pre-approved before looking for homes. You’ll need to gather some paperwork for pre-approval including bank statements, tax returns and information about your debt. Have all of these things ready when you talk with the mortgage loan officer.

Having a pre-approval letter also demonstrates to sellers that you are serious about buying. They might be more likely to respond quickly to your offer if they feel that the deal will go through.

Make A List Of Things That You Must Have

If you are in a hurry to buy a home, you don’t want to waste time looking at houses that won’t meet your needs. So, before doing any online research, make a list of things of your must-have amenities. Zeroing on the things that you must have will help keep you focused on properties that are right for you.

Search Areas That Have A lot of Inventory

Don’t waste time looking at communities that don’t have much inventory. The real estate market will be a lot more competitive. Instead, try choosing areas that meet your needs as far as easy access to your work, quality of the school and so forth. Make sure that they have plenty of inventory available. You might have to hunt in surrounding neighborhoods to find something quickly.

Be Available to Act Quickly

If you want to close quickly, you must be available to act as soon as an offer is accepted. It is essential to be available anytime to get in touch with your agent, respond to counter-offers and answer questions. Provide your agent with multiple ways to reach you — by phone, email or text.

Contact your trusted mortgage professional today to help you with a pre-approval for your new home purchase. This is one of the most important and timely steps you can take to ensure a smooth transaction when you are ready to put in an offer on your new home.

If you have been looking for a new home, and you find one offered under a short sale, this may be to your advantage. While some buyers are wary about buying a home that needs to be sold with the approval of the lender, it’s a great way to get a bargain on a home that you love.

A short sale may be a perfect way to buy a home, as long as you are able to wait until the offer is approved.

The Basics Of A Short Sale

A short sale occurs when the homeowner is facing a foreclosure and trying to avoid it. The true owner of the property, is the lender who provided the money to purchase the home. The borrower owes more on the home than it is worth, and many stop making mortgage payments. Instead of allowing the home to sit there and go to a foreclosure, the lender tries to cut their losses through the process of a short sale.

Additionally, there may be other liens on the home that have to be satisfied by the sale of the property. Anyone that holds a lien on the property has to negotiate the money they are willing to accept for the deal to be finalized.

Why A Short Sale Benefits The Buyer

When you make an offer on a home that is selling under a short sale, you can usually offer less than what the home is worth. The homeowner is eager to sell the home. The homeowner will want to accept an offer fast to get the process started and avoid a foreclosure.

While you may have to wait longer for a short sale to go through than a traditional sale, the savings on the price of the home are usually worth it. Lien holders understand that a short sale is usually the best option to get most of their money, so they are anxious to settle the deal fast.

A short sale is right for you if you aren’t trying to buy a home fast. When you are a savvy buyer, you can make an offer less than the asking price, but you’ll have to wait for all lien holders to accept it. If your current living situation provides you with the opportunity to wait, a short sale will give you more house for your money.

Contact your trusted mortgage professional to secure your financing pre-approval, a necessity prior to negotiating this type of transaction.